US stocks hold small gains despite escalating tensions in Iraq

U.S. stocks managed to close modestly higher in seesaw trading session Friday, brushing off mounting geopolitical uncertainties in Iraq.
The Dow Jones Industrial Average rose 41.55 points, or 0.25 percent, to 16,775.74. The S&P 500 was up 6.05 points, or 0.31 percent, to 1,936.16. The Nasdaq Composite Index advanced 13.02 points, or 0.30 percent, to 4,310.65.
U.S. President Barack Obama said Friday that "we will not be sending U.S. troops back into combat in Iraq," adding that it's ultimately up to the Iraqis to solve their problems.
The stock market gave little reaction to Obama's remarks, shrugging off jitters in Iraq that dragged major stock indices down Thursday.
Reports said that Iraq militants took control of the northern oil hub of Kirkuk and halted repairs to the main pipeline from the Kirkuk oil field to Turkey, threatening the crude output of the country.
With rising concerns over Iraq, oil prices continued to rise but at a slower rate Friday, following a surge on Thursday. Light, sweet crude for July delivery moved up 38 cents to settle at 106. 91 U.S. dollars a barrel Friday on the New York Mercantile Exchange, while Brent crude for July delivery gained 39 cents to close at 113.41 dollars a barrel.
Economists think that soaring oil prices may pose a threat to the sluggish global economic recovery, thus overshadowing the stock market.
However, investors hesitated to sell off U.S. stocks, after major stock indices had pulled back in the past couple of sessions from recent record run.
On the economic front, Thomson Reuters and the University of Michigan's preliminary reading of the U.S. consumer sentiment index for June came out at 81.2, falling short of market consensus of 83.
The U.S. Producer Price Index (PPI) for final demand fell 0.2 percent in May on a seasonally adjusted basis, which followed increases of 0.6 percent in April and 0.5 percent in March, said the U.S. Labor Department Friday. Analysts had expected a modest gain of the May PPI
"After two months of significant PPI increases, a small pullback does not indicate price weakness in the economy," said Jay Morelock, an economist at FTN Financial.
"The concern for producers going forward will be the rising cost of oil in the face of escalating aggression in the Middle East," he added.
The Dow and the S&P 500 suffered their first weekly losses in four weeks, down 0.9 percent and 0.7 percent, respectively. While the Nasdaq ended the week 0.2 percent lower.
The CBOE Volatility Index, a gauge of fear in the market, dipped 3.03 percent to end at 12.18 Friday.
In other markets, gold futures on the COMEX division of the New York Mercantile Exchange logged minor gains Friday as investors monitored geopolitical instability in the Middle East. The most active gold contract for August delivery added 0.1 dollar, or 0.01 percent, to settle at 1,274.1 dollars per ounce.
The U.S. dollar recovered against major currencies Friday amid escalating tensions in Iraq and tepid U.S. economic data.
In late New York trading, the euro fell to 1.3533 dollars from 1.3564 dollars of the previous session, and the dollar bought 102. 02 Japanese yen, higher than 101.67 yen of the previous session.